NEWS

Inflation is associated with a decrease in purchasing power and an increase in the prices of goods and services, including real estate. Economic factors, such as inflation, have a significant impact on the real estate market.

Investing in real estate during inflation can be a wise decision for several reasons.

Protection against inflation: Real estate provides a type of protection against inflation because it tends to increase in value over time. As the value of money decreases during inflation, the opposite happens with real estate, and its prices increase, thus “protecting” your investment.

Rental revenue: By investing in rental properties, you can take advantage of the rental revenue that grows with inflation. As the cost of living increases, the value of properties, both for purchase and rental purposes, also tends to rise. This can lead to higher rental income for property owners.

Physicall assets: Real estate is a physical asset that you can physically see and touch, unlike stocks or bonds. This provides a sense of security during inflation since the value of stocks and bonds can be volatile.

Montenegro – inflation and the real estate market

Real estate market in Montenegro has seen a steady increase in prices since the end of 2020. This trend in rising prices coincides with the global inflation and the ongoing war in Ukraine, which has led to an influx of Russian and Ukrainian residents into Montenegro. As a result, the demand for buying and renting properties has significantly increased, driving prices up. Real estate agencies in Montenegro have been advertising for months that they are constantly seeking properties for both rental and sale purposes due to high demand.

As time goes by, interest in purchasing real estate is increasing and the offer is expanding, although it still lags behind the demand.

Inflation diminishes the value of money, but it has little effect on real estate, leading to the expectation that the trend of rising real estate prices will continue.

Why invest in real estate in Montenegro?

Investing in real estate in Montenegro during inflation is appealing to both foreign and local citizens. One reason for this is that real estate prices in Montenegro are relatively lower compared to other European countries. . This means that investing in real estate in Montenegro can provide an excellent opportunity for profit when the real estate market stabilizes again.

Another benefit of investing in real estate in Montenegro is that the country is situated in a region that draws more tourists each year, offering excellent potential for renting properties during the summer season. . Over the last ten years, Montenegro’s tourism industry has seen substantial expansion, resulting in a surge in demand for real estate in popular tourist destinations like Budva, Tivat, Kotor, and others..

For individuals who possess property on the coast of Montenegro, rental revenue can be substantial, with the rental rate being dependent on the location and appeal of the property. It can be concluded that, in times of inflation, the most lucrative course of action is to convert cash into real estate, thereby guaranteeing the preservation of invested capital’s value and safeguarding it against the detrimental impacts of inflation. Moreover, if acquiring the property leads to a profitable rental income, the decision to purchase is deemed financially wise.